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On Monday, Benchmark analysts maintained their Hold rating on Integral Ad Science Holding Corp (NASDAQ:IAS) shares while awaiting more substantial information to assess the company’s revenue outlook for 2025. With a robust gross profit margin of 78.5% and revenue growth of 11.75% over the last twelve months, the company has shown strong fundamental performance. According to InvestingPro analysis, IAS currently appears undervalued based on its Fair Value calculation, though Benchmark remains cautious due to several factors that could contribute to variability throughout the year.
Integral Ad Science’s fourth quarter results showed outperformance, but Benchmark analysts pointed out a challenging brand demand environment at the start of the year. InvestingPro data reveals the company maintains excellent financial health with a score of 3.12 (rated as "GREAT") and holds more cash than debt on its balance sheet. Additionally, the company faces difficult first-half measurement comparisons and first-quarter growth guidance that falls below the total company’s performance. Although context control indications were stable in the fourth quarter and first-quarter estimates, with relatively easy comparisons, Benchmark expects mid-single-digit growth for the rest of 2025 as growth from large advertisers slows further.
The analysts noted a significant deceleration in measurement during the first quarter suggested by single-digit growth guidance. This trend continues from the peak growth seen in the second quarter of 2024. While social media revenue remained robust through 2024, the slowdown in open web measurement revenue, which accounts for 46% of the total, indicates a growing reliance on social platforms amidst tough comparisons in the first half of 2025. For deeper insights into IAS’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.
On a positive note, publisher growth accelerated to approximately 30% year-over-year in the fourth quarter, driven by new auction bidding features and successful partnerships with Oracle (NYSE:ORCL). The company has also made over 30 recent hires from Oracle with expertise in programmatic advertising, data, and mid-market strategies. The analysts expect continued tailwinds for supply-side CTV/RTB in 2025.
Benchmark awaits further details on how Oracle’s collaboration will contribute to Integral Ad Science’s reported results and the ongoing outlook. For the time being, they remain slightly below the company’s projected revenue range of $588 million to $600 million. The analysts’ revised estimates are summarized in a table accompanying their commentary.
In other recent news, Integral Ad Science reported fourth-quarter earnings that exceeded revenue expectations, posting $153 million compared to analyst estimates of $148.97 million. This represented a 14% year-over-year increase. However, adjusted earnings per share fell slightly short at $0.09 against the $0.11 consensus forecast. The company saw significant growth across its key segments, with optimization revenue rising 11%, measurement revenue increasing 12%, and publisher revenue jumping 30% from the previous year. For the first quarter of 2025, IAS anticipates revenue between $128-131 million, surpassing the analyst consensus of $126.5 million. Full-year 2025 revenue guidance was set at $588-600 million, which is above the midpoint of analyst estimates. Scotiabank (TSX:BNS) analyst Nat Schindler raised the price target for IAS to $12 from $10, maintaining a Sector Perform rating. The analyst noted the company’s robust performance and strategic expansion into markets like China, highlighting the need for continued growth before considering a more favorable rating.
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